PRESS DIGEST-Australian Business News - Feb 18

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Terry Davis, chief executive of Coca-Cola Amatil, has lobbied for a discussion into aggressive supermarket strategies, such as the sale of popular items below cost to lure shoppers. Mr Davis said the Federal Government should change the Fair Work Act and add various incentives, such as accelerated depreciation, to level the playing field for food and beverage manufacturers competing with imports. Page 15.

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Mark Fitzgibbon, chief executive of NIB Holdings, revealed the health insurer was "sensing some investment opportunities" but was unlikely to embark on any major acquisitions. "We'd never do anything large, but we're always looking at opportunities we can swarm over," he said. The insurer's market capitalisation is close to A${esc.dollar}1 billion after its share price rose by nearly 60 percent over the last year. Page 15.

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Gordon Galt, chairman of Discovery Metals, has protested to the Australian Securities and Investments Commission against the conduct of Chinese private equity group Cathay Fortune over the abandonment of a A${esc.dollar}830 million takeover for the copper miner. Mr Galt said the bidder's initial statement had self-defeating clauses allowing it to walk away easily. Yong Yu, the founder of Cathay, said Discovery was trying to "rewrite history" to disguise a "failure  to secure any value for shareholders". Page 15.

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Australia and New Zealand Banking Group (ANZ) has opted not to pay back investors for a A${esc.dollar}686 million retail bond issue, which paid 9.66 percent interest. The bank said it had never intended to meet the first call date given that there was no rise in the interest rate margin. Sean Keane from Triple T Consulting noted that "there is likely to be some further fallout" from ANZ's decision and investors "will reassess their assumptions about bank issued callables in the current environment". Page 18.

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The Australian Competition and Consumer Commission may impose a code of conduct to oversee dealings with suppliers if the supermarket sector cannot create an adequate standard of its own. The National Farmers Federation, Woolworths, Coles and the Australian Food and Grocery Council agreed to formulate a code last year over concerns that manufacturers and suppliers were being excessively controlled by more powerful market players. Page 20.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Echo Entertainment Group will install more multi-terminal electronic gaming machines and will merge more of its customer service functions online as the casino operators takes steps to cut costs. Chief executive John Redmond, who took up the role six weeks ago, added that some workers would be made redundant but declined to detail how many. Page 19.

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Abacus Australian Mutuals will today publish figures showing that two-thirds of Australian adults would welcome an investigation into the banking industry. Compiled by D&M Research last year, the online survey of 1000 people found 65 percent of respondents believed there was not enough competition in the sector. Around half of respondents said the dominance of Australia's major banks was unhealthy for the country. Page 19.

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Ian Narev, chief executive of Commonwealth Bank, yesterday said the lender's record interim profit was not solely due to higher net interest margins, as the bank's wealth management division and overall productivity had improved. He defended the bank's decision not to pass on official interest rate cuts from the Reserve Bank of Australia, saying the bank's funding costs had risen as it tried to lure depositors with higher rates. Page 19.

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Mike Rann, Australia's newly appointed high commissioner to Britain, yesterday said Australia's increased concentration on trading with Asia would not damage its established connections with Britain. Mr Rann added that Australian companies would use Britain as a launch-pad for entering European markets. Page 20.

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Billabong International could find out as early as this week whether either of its two suitors will go ahead with their proposed takeover offers for the surf, street, and skiwear retailer. Boutique investment group Altamont Capital Partners has joined with clothing group VF Corporation to compete with a A${esc.dollar}527 million offer proposed by Billabong Americas head Paul Naude. Mr Naude is backed by Bank of America Merrill Lynch and private equity fund Sycamore Partners. Page 21.

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Chip Brewer, chief executive of Callaway Golf, said the Australian market is crucial to the manufacturer's chances of breaking even this financial year. "It's a sports-mad country that punches over its weight class in golf," Mr Brewer said. However, Bruce Peacock, national account manager at Callaway, noted that sales in Australia were "quite flat" compared to the rest of the Asia Pacific. Page 21.

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Super Retail Group chief executive Peter Birtles described the internet "as a growing" threat to the diversified retailer. "The internet essentially opens us up to international competition and global competitors who have more scale and more buying power," Mr Birtles noted. The company is pushing ahead with loyalty programs to utilise its market strengths. Page 21.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Rob Whelan, chief executive of the Insurance Council of Australia, warned yesterday that Australia's risk rating on international re-insurance markets has worsened due to recent extreme weather. The changes have led to increased premiums which, Mr Whelan says "have increased in some cases by as much as 50 percent". Page B1.

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Anthony Matthews, the liquidator appointed to wind up mining magnate Nathan Tinkler's Patinack Farm Administration (PFA), may still file an insolvent trading claim against both the former billionaire and Troy Palmer, a fellow director of the private vehicle. The Tinkler Group has since established Thoroughbred Administration to take over the functions of PFA, after failing to prevent its winding up. Page B1.

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Six independent directors on the board of APN News & Media are expected to make a decision on whether to resign from the troubled media group this week. The turmoil comes after a proposal by chief executive Brett Chenoweth to pay down debt via a capital raising was defeated. Independent News Media, the largest shareholder in APN, has joined forces with fund manager Allan Gray to call an extraordinary general meeting to remove Mr Chenoweth and spill the board. Page B2.

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Westpac Banking Corporation has ordered its employees not to sell home and contents insurance to residents in flood-prone areas unless they have a home loan with the bank. The change, which came into effect on Saturday, comes after Brian Hartzer, chief executive of Westpac's financial services unit, said the bank was "committed to help" Queenslanders rebuild after the recent floods. Page B3.

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Gary Hendrickson, chairman of the United States-based Valspar, whose Australian business owns the Wattyl paint brand, said he expects the Australian residential housing market to "continue to be weak throughout, potentially throughout the remainder of the year". He added that prospects for improvement were not apparent. Page B3.

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THE AGE (www.theage.com.au)

Federal Treasurer Wayne Swan criticised the recent talks between the Group of Twenty finance ministers, saying discussion about "so-called currency wars" was "completely misguided" and that employment and growth were more important issues. He added that "what we should support is domestically-focused policies in the major advanced economies aimed at boosting growth and jobs". Page B3.

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